Franklin Covey Co. (NYSE:FC) is a global company specializing in organizational performance improvement. It offers training and consulting services to help businesses enhance productivity and leadership. In the competitive landscape, Franklin Covey stands out with its strong Return on Invested Capital (ROIC) of 36.27% compared to its Weighted Average Cost of Capital (WACC) of 10.23%, a key indicator of financial efficiency.
Franklin Covey's ROIC to WACC ratio of 3.54 suggests that the company is generating returns significantly above its cost of capital, indicating efficient capital use. This efficiency is crucial for investors as it reflects the company's ability to create value from its investments.
In comparison, CRA International, Inc. (CRAI) has a ROIC of 11.57% and a WACC of 9.19%, leading to a ROIC to WACC ratio of 1.26. Although positive, CRAI's ratio is lower than Franklin Covey's, indicating less efficient capital use. Similarly, Thermon Group Holdings, Inc. (THR) has a ROIC to WACC ratio of 0.91, with a ROIC of 7.51% and a WACC of 8.30%, showing it generates returns below its cost of capital.
Forrester Research, Inc. (FORR) presents a negative ROIC of -51.82% against a WACC of 7.35%, resulting in a ROIC to WACC ratio of -7.05. This negative ratio indicates that Forrester is not generating sufficient returns to cover its cost of capital, highlighting inefficiency. In contrast, Forestar Group Inc. (FOR) boasts a remarkable ROIC of 122.97% and a WACC of 9.27%, achieving a ROIC to WACC ratio of 13.26, the highest among its peers.
Alamo Group Inc. (ALG) has a ROIC of 10.48% and a WACC of 9.27%, resulting in a ROIC to WACC ratio of 1.13. While positive, it is still lower than Franklin Covey's, indicating less efficient capital use. Overall, Franklin Covey's strong ROIC to WACC ratio highlights its effective capital utilization compared to its peers, except for Forestar Group, which leads in capital efficiency.
Read More